CLS operates a global multi-currency infrastructure to settle FX trades. It is one of the largest Financial Market Infrastructures (FMIs) in the world, settling an average value of $5 USD trillion each day. CLS wanted to prove to its members the value of the service in not only reducing risk, but also in saving liquidity.
Measure liquidity savings of the CLS service to its members compared to a situation where the FX trades are settled in RTGS systems and by bilateral netting.
Simulations with FNA demonstrated that CLS provided an estimated annual collateral cost savings of more than $400 million across all of its members.
- Case Study “CLS Liquidity Savings” from Book “Network Theory and Financial Risk”